Insolvency for central banks therefore would mean failure to pay obligations as they fall due (equitable insolvency) rather than liabilities exceeding assets (balance sheet insolvency).

As long as central banks don't have significant foreign exchange-denominated liabilities or index-linked liabilities, it will always be possible for the central bank to ensure its solvency though monetary issuance (seigniorage).

...which the ECB won't do, leaving recapitalisation by the Treasuries of the 15 Eurozone governments, which is tricky. Did I miss something?


_{*Lunatic*, n.
One whose delusions are out of fashion.}